What Does Liquor Liability Insurance Cover?
Liquor liability coverage protects businesses that serve, sell, or distribute alcohol against accidents or damage from intoxicated patrons. An insurance agent can assess the business’s alcohol service practices and risks to determine the appropriate level of coverage. Here are some aspects that the liquor liability insurance covers:
Legal Defense Costs
Liquor liability coverage pays the costs of hiring an attorney to defend your business in court. Such costs include filing fees, deposition expenses, expert witness fees, and other expenses related to the legal process.
If an alcohol-related incident leads to a legal claim against your business, there may be costs associated with investigating the incident and gathering evidence to support your defense.
Liquor liability coverage can pay for these investigation expenses, including hiring investigators to examine the circumstances surrounding the incident.
This insurance covers the costs of negotiating a settlement with the claimant or their lawyers, including mediation or arbitration fees.
Bodily Injury
If a patron becomes intoxicated at your establishment and injures themselves, liquor liability insurance can cover their medical expenses. This includes treatment for injuries sustained in slips, falls, or other accidents resulting from intoxication.
The insurance can cover third-party injuries sustained in fights, assaults, or accidents involving vehicles driven by intoxicated patrons. Bodily injury claims often include compensation for the pain and suffering the injured party suffered.
Liquor liability coverage can pay for these damages, enabling your business to fulfill its financial obligations in the event of a lawsuit.
Property Damage
Liquor liability coverage pays for damages to property caused by intoxicated patrons, including vandalism. This includes instances where patrons intentionally damage property, such as breaking windows, furniture, or fixtures while under the influence of alcohol. Businesses can use the compensation to repair or replace damaged property.
If an intoxicated patron damages property while operating a vehicle after leaving the insured establishment, this insurance can cover the damages. This includes accidents involving vehicles crashing into buildings, fences, or other structures on or off the premises. With the right coverage, businesses can file claims and communicate with insurers for timely and just compensation.
Parties and Events
Liquor liability insurance extends coverage to events or functions not held on the insured business’s premises, such as company parties, weddings, or off-site catering events where alcohol is served.
This protects the business from potential liabilities arising from alcohol-related incidents at these off-site locations. The coverage compensates for bodily injury and property damage resulting from the service or consumption of alcohol by event attendees.
Liquor liability policies may contain exclusions that limit coverage for certain types of events, activities, or circumstances. Common exclusions may include events with a large number of attendees, events held at high-risk venues, or events serving alcohol to minors. Businesses should review the exclusions and policy terms to buy coverage that suits their needs.
Dram Shop Lawsuits
Dram shop laws hold businesses liable for serving alcohol to individuals who cause harm to themselves or others due to intoxication. Businesses are expected to monitor patrons’ alcohol consumption and take steps to prevent over-service to visibly intoxicated or underage individuals.
Under dram shop laws, businesses may face penalties for not complying with set rules and regulations. Liquor liability insurance protects businesses against legal claims and financial losses arising from dram shop liability.
Buy Liquor Liability Insurance for Your Business
Many states require businesses that serve alcohol to maintain liquor liability coverage as part of their licensing requirements. Having appropriate coverage in place can help businesses avoid fines or penalties for non-compliance. The right insurance vendor will have liquor liability coverage that meets your needs and expectations. Contact an experienced insurance agent to discuss your liquor liability insurance needs today.
